Australia trade balance remained in deficit in May but is expected to return to surplus as exports pick up over the coming months.

The balance on goods and services was a deficit of $285 million in May, seasonally adjusted, compared with a deficit of $26 Million in April, according to data released by the Australian Bureau of Statistics on Thursday.

Commonwealth Bank senior economist John Peters said the growth in exports during the month had been offset by domestic demand for imports.

“The higher dollar is facilitating strong imports growth by making imported goods a lot cheaper.”

However, he said the trade balance was likely to return to surplus as exports rose over the coming months.

“We expect that to turn around as demand in Asian economies picks up over the coming months.”

HSBC chief economist Paul Bloxham said the data was a mildly positive sign that domestic trade was recovering.

“We had an increase in imports and exports in the month,” he said.

“Both of those things are a relatively positive sign, but the net balance of those two things was a slightly larger deficit than last month. We’re taking about relatively small moves, in the scheme of things.

“I think the key story is that we’ve seen a pickup in commodities exports, and in a trend sense, that’s continued since around the beginning of the year, and it’s what we’re looking to see, as the effects of the Queensland floods wear off.”